Leading article: Higher education faces a salutary period of transition

Watch carefully. After this year, the transition from school to higher education in England, Wales and Northern Ireland may never be quite the same again – perhaps for better; we hope not for worse. One reason why change is afoot is that this is the last year that the current grading system applies to A-levels.

Next year, the A* grade comes into force, and with it, the distinction between the very good and the best that the top universities have clamoured for. The change provides an opportunity to restore the "gold standard" reputation of A-levels that many believe has become tarnished as the proportion of pupils awarded A grades has ballooned. Recalibrating the scores required for each existing grade might have been a simpler solution, but the A* is the one chosen, and it should have the desired effect.

The grading change, however, is almost the least of what is happening. This year a record 600,000 applications have been made for degree courses – an increase surely fuelled by the difficult job market. And while the number of places funded by the Government has risen by 13,000, the number of applicants has risen by more than four times this. Competition for places will be fiercer than ever in recent memory. Those without the required grades will find it harder to obtain a place, while many more than in previous years may not find a place at all.

They will be left with a potentially life-changing choice: should they try to improve their grades and reapply next year, when competition could be even sharper; should they try to find a vocational course or other training; should they take time out to see something of the world, or should they try to find a job – at a time when jobs are in especially short supply? Of those unable to go to university, some will doubtless fall through the net and join their less well-qualified contemporaries on state benefits.

There is an irony in this year's record level of applications. If there had been as many university places as qualified applicants – as there has been more or less in recent years – this government would have come close to reaching the target it set itself of having 50 per cent of school-leavers going on to college. It will fail this year, not because applicants are lacking, but largely because supply of places has failed to keep pace with demand.

The target, of course, raised questions of its own. It seemed to have been plucked out of the air for its headline value, without much thought about whether 50 per cent of school-leavers would necessarily benefit, or whether there would be graduate-level employment for them afterwards. The number going on to higher education, we would argue, is not something usefully dictated by targets.

For would-be students, the introduction of top-up fees has also complicated the calculations. To put it crudely, they have to decide whether their money is likely to be well spent: not necessarily, or only, in terms of a higher expected salary, but in social and educational terms as well. Gratifyingly, this year's record number of applications suggests that so far relatively few have been deterred by fears of long-term debt or a future shortage of suitable jobs.

Top-up fees do, however, seem to be starting to have an effect on students' – and parents' – expectations. There is more attention now to the quantity and quality of teaching than there was – which is no bad thing, so long as it is not accompanied by the unjustified pressure for higher grades that has so compromised standards at many American universities.

The value-for-money calculation is not the only one that is likely to precipitate change. The number of school-leavers who may be forced to adjust or abandon their university plans this year could alter expectations much more broadly, especially if this year's ratio of applicants to places starts to become the rule rather than the exception.

Disappointment for some, however, could have a salutary effect in the longer term. At best, school-leavers will become more discriminating about their choices and treat university as one among several options. In so doing, they will throw down the gauntlet to the Government and employers to provide more and better alternatives, including more apprenticeships, work placements and part-time courses tailored more closely to the job market. Work-related skills have not been a strong point of education in Britain. That is the challenge this year's university entrance season will pose.